Fandel v. Empire Dist. Elec. Co.

• Decision Date: 23 January 2013
• Docket Number: No. SD 31966.,SD 31966.
• Citation: Fandel v. Empire Dist. Elec. Co., 393 S.W.3d 100 (Mo. App. 2013)
• Court: Missouri Court of Appeals
• Parties: David H. FANDEL and Dawn C. Fandel, as Trustees of the D & D Foundation Trust dated October 2, 2000, Respondents, v. The EMPIRE DISTRICT ELECTRIC COMPANY, Appellant.

393 S.W.3d 100

David H. FANDEL and Dawn C. Fandel, as Trustees of the D & D Foundation Trust dated October 2, 2000, Respondents,

v.The EMPIRE DISTRICT ELECTRIC COMPANY, Appellant.

No. SD 31966.

Missouri Court of Appeals,

Southern District,

Division One.

Jan. 23, 2013.

Harry Styron, Branson, MO, for Respondents.

Mark A. Fletcher, Springfield, MO, for Appellant.

WILLIAM W. FRANCIS, JR., J.

The Empire District Electric Company(“Empire”) appeals the trial court's grant of summary judgment in favor of David H. Fandel and Dawn C. Fandel, as Trustees of the D & D Foundation Trust dated October 2, 2000(“the Trust”).Empire now asserts three points on appeal.We find the third point dispositive and reverse the judgment and remand for further proceedings.

Factual and Procedural Background

On May 6, 2010, the Trust filed its “Petition for Quiet Title, Adverse Possession, Termination of Easement, and Damages for Inverse Condemnation” against Empire.In its petition, the Trust set out that it purchased—via quitclaim deed—a certain parcel of real estate (“the disputed property”) from Adobe L.L.C., on December 18, 2007, and recorded that deed on March 3, 2008.¹It related that several weeks following the recordation, it received a letter from Empire “asserting that Empire was the owner of a portion of the Trust's Parcel on the basis of being successor in title to Ozark Power & Water, the grantee of a ... deed from Eli and Lola Hoenshel” executed in 1912 and filed with the Taney County recorder in 1913.²Empire asserted in its letter that it basically owned from the shoreline of Lake Taneycomo, typically around 702 feet above sea level, to a point 715 feet above sea level upon the high bank of the lake.The Trust stated in its petition that Empire's letter mischaracterized the nature of its ownership interest, if any, in that the deed from the Hoenshels to Ozark Power & Water was merely a flowage easement or flowage deed in that it contained the limitation that the interest was for “all lake purposes in connection with the dam being constructed on the White River [,]” as well as the reservation that “said right reserved by the [grantors] to remove the fences and occupy said land down to the actual water line as aforesaid at their own risk of damage whatsoever.”³The petition then asserted four counts against Empire: Count I for a declaratory judgment; Count II for adverse possession based on the fact that there had been buildings located on the disputed property since before 1966, the Trust's predecessors in interest had been in hostile, visible, open, and notorious possession of the disputed property since that time, and Empire had never previously made a claim to an interest in the disputed property; Count III for “Termination of Flowage Easement by Full or Partial Abandonment” due to Empire's failure to use the easement in any manner; and Count IV for inverse condemnation in that Empire's sudden decision to use the disputed property, which the Trust asserts it had abandoned, amounts to a taking without compensation.As a result of the foregoing, the Trust asked the trial court to “declare that the 1913 quitclaim deed by which Empire claims title to a portion of the Trust's real estate merely conveyed a flowage easement rather than fee title”; “affirm the superiority of its title to the [disputed property] on the basis of adverse possession[ ]”; “determine that the flowage rights of Empire have been terminated, in whole or in part by abandonment, completion of purpose, or adverse possession[ ]”; and “award damages to the Trust for the inverse condemnation resulting from the loss of property rights due to the extent of ownership or control that Empire now wishes to exert on the basis of its federal hydropower license ... [.]”In its Answer to the Trust's petition, Empire asserted the following affirmative defense:

Count I of [the Trust's] Petition is barred by [section] 516.090, [RSMoCum.Supp.2006,] which provides, in part, ‘this section shall be construed to prohibit any judgment granting adverse possession to a claimant where the defendant possesses an interest in land described in the recorded deed and is a public utility as defined in [s]ection 386.020.’Empire states that it possesses an interest in the [disputed] property which is described in the recorded deed, and that it is a public utility as defined in [s]ection 386.020, such that [s]ection 516.090[, RSMoCum.Supp.2006,] prohibits any judgment granting adverse possession to [the Trust].⁴

The Trust filed its “Motion for Summary Judgment on Counts I and II and Statement of Facts” on June 9, 2011.The Trust asserted it had adversely possessed the disputed property through its predecessors from 1982 to 2000 and in support of its claim, it offered the affidavits of two of those predecessors.Based on the aforementioned affidavits, the Trust maintained in its motion for summary judgment that

possession of the [d]isputed [p]roperty above 708 feet by the Trust and its predecessors in title was open, hostile, notorious and continuous for periods greater than 10 years before section 516.090 was amended (S.B. 1045, enacted June 12, 2006, effective 90 days after adjournment) to confer immunity to public utilities against divestment of title through the application of the doctrine of adverse possession.

It further related the “Trust and its predecessors in title have always paid real estate taxes on all or substantial portions of the [d]isputed [p]roperty and maintained it[,]” while Empire has “paid taxes on a portion of the [d]isputed [p]roperty only for years 1998, 2006, 2007, 2008 and 2009[,] ... but not any improvements on the [d]isputed [p]roperty (other than electrical power equipment).”

The trust relied upon the affidavits of Ronnie J. Kliewer and Gordon Forsythe to prove up the element of actual possession in its predecessors.In oral argument, the Trust admitted the affidavits might have been used by the trial court to infer a conclusion of actual possession and intent to exclude others from control.

In its response to the motion for summary judgment, Empire denied through proof that the Trust received title to the property from Adobe, L.L.C., in that it was the property owner pursuant to the 1913 deed from the Hoenshels; “the language in the 191[3] Deed ‘all for lake purposes in connection with the dam being constructed on the White River,’ describes the extent of the grant of said Deed[ ]”; the Trust could bring such an action against it due to the amendment to section 516.090; the affidavits of the Trust's predecessors in interest supported the “allegation that [the Trust] and its predecessors in title have always paid real estate taxes on all or substantial portions of the [d]isputed [p]roperty and maintained it[ ]”; and denied Empire paid taxes on the disputed property for only those years listed by the Trust.⁵Empire argued the language in the 1913 deed relating to “ ‘for lake purposes' ” does not limit the entirety of the conveyance to one specific purpose nor does it interfere with the grant of fee simple title, which it asserts was actually granted by the 1913 deed.Further, on the issue of the application of section 516.090, Empire pointed out that the Trust argued the statute is unconstitutional as applied to it because it had a vested interest in the property prior to the amendment taking effect in 2006 such that a retroactive application of the law would be unconstitutional.Empire, on the other hand, maintained the statute was procedural in nature and simply removes the ability of the trial court to enter judgment against a public utility utilizing the remedy of adverse possession.Empire asserted the Trust misread the statute in that section 516.090“does not purport to take away or invalidate any interest [the Trust] may have acquired as a result of adverse possession prior to its enactment.Rather the statute acts prospectively to bar courts from entering a judgment quieting title in favor of an adverse possession plaintiff where the defendant is a public utility.”Further, Empire asserted the Trust's motion for summary judgment“fails to establish that it was in ‘actual’ possession of the disputed property” as “[n]one of [the Trust's] affidavits proves the intent of [the Trust] and its predecessors to exclude others from the land.Rather, each affidavit avers that no one else was in possession of the property.”

The trial court entered its judgment on December 12, 2011.As for Count I, the request for a declaratory judgment, the trial court found “there is a patent ambiguity in the [1911 and 1913 deeds between Empire's predecessor in interest and the Hoenshels] and that parole evidence is necessary to interpret them.Thus, there are genuine issues in controversy and summary judgment is denied as to Count I.”As for Count II, the adverse possession count, the trial court concluded, based in part on Empire Dist. Elec. Co. v. Gaar,26 S.W.3d 370(Mo.App. S.D.2000), that section 516.090...